Crédit Agricole Egypt continues to achieve remarkable results
And sustained commercial momentum in 2016
Highlights on 2016 results:
An overall satisfactory commercial development:
During 2016, Credit Agricole Egypt has pursued its growth path by enhancing its client franchise.
Number of customers has witnessed a net growth of 4% over 2015, in addition to the further development of the branches network by opening 2 new branches, the 1st is located in Loran, Alexandria and the second branch in Mansoura in Delta region.
Total Assets grew by 44.75% over 2015 (13.6% without EGP devaluation effect).
Business momentum remained strong with a robust growth of clients’ deposits of 46.8% (10.2% without devaluation effect) in 2016, especially the low cost deposits which has increased by 55.7%, enabling the Bank to maintain competitive cost of funds.
Gross loans portfolio increased by 30.8% (-0.4% without devaluation effect) over December 2015, due to the active demand of retail clients (14.6%) and reduced foreign currency corporate loans exposure since the beginning of 2016.
| Deposits – EGP Million | 2016 | 2015 | Δ 2016/2015 |
| High Cost | 23612 | 16682.2 | 0.415 |
| Low Cost | 15541.4 | 9981 | 0.557 |
| Total | 39153.4 | 26663.2 | 0.468 |
| Loans – EGP Million | 2016 | 2015 | Δ 2016/2015 |
| Local Currency | 11273.4 | 9992.3 | 0.128 |
| Foreign Currency | 7929.2 | 4689.3 | 0.691 |
| Total | 19202.6 | 14681.6 | 0.308 |
A sustainable profitability:
During 2016, the growth of the net banking income (revenues) was EGP 2,814.3 million, a strong increase of 25.1%. The Net interest income increased by 32.3% driven by both higher margins and volumes. As for the net commissions and fees, a decrease of 6.9% has been recorded mainly on trade finance activities which were impacted by the slowdown in volumes of transactions due to foreign currency scarcity. Finally, the Net Trading Income (mainly foreign exchange) recorded a growth of 49.9% over 2015 at EGP242.3million.
| Income Statement – EGP Million | Q4-16 | Q3-16 | Q4-15 | Δ Q4/Q4 | 2016 | 2015 | Δ 2016/2015 |
| Net Interest Income | 638.1 | 537.1 | 424.6 | 50.30% | 2,093.90 | 1,582.80 | 32.30% |
| Net Fees & Commission Income | 106.2 | 103.9 | 117.4 | -9.60% | 446.1 | 479.2 | -6.90% |
| Net Trading Income | 120.2 | 27.5 | 35 | 243.50% | 242.3 | 161.7 | 49.90% |
| Other Operating Income | 17.3 | 4.6 | 5.2 | 232.20% | 31.9 | 25.4 | 26.00% |
| Net Banking Income | 881.9 | 673.1 | 582.3 | 51.50% | 2,814.30 | 2,249.10 | 25.10% |
| Total Expenses | -241.5 | -214.3 | -209.2 | 15.40% | -870.6 | -787.9 | 10.50% |
| Gross Operating Profit | 640.4 | 458.8 | 373.1 | 71.60% | 1,943.60 | 1,461.20 | 33.00% |
| Other Income (Expenses) | 30.4 | 44 | -27.5 | nm | 78.7 | 10.6 | X 6.4 |
| Income Before Impairment &Tax | 670.7 | 502.8 | 345.6 | 94.10% | 2,022.30 | 1,471.80 | 37.40% |
| Impairment | -149.2 | -65.3 | -28.2 | nm | -238.7 | -117.4 | 103.30% |
| Net Income Before Tax | 521.5 | 437.5 | 317.4 | 64.30% | 1,783.60 | 1,354.40 | 31.70% |
| Tax | -130.4 | -94.1 | -31.7 | 311.60% | -416.8 | -318.8 | 30.70% |
| Net Income | 391.2 | 343.4 | 285.7 | 36.90% | 1,366.90 | 1,035.60 | 32.00% |
| Cost / Income Ratio | 27.40% | 31.80% | 35.90% | 30.90% | 35.00% |
Expenses stand at EGP870.6 million in 2016, an increase of 10.5% mainly due to an increase in staff costs, as well as continuous investments to support the digital transformation of the bank. It should be noted that in Q4-2016, Credit Agricole Egypt launched its Mobile banking application (banki by Credit Agricole), a new bank website and the Mobile wallet.
Credit Agricole Egypt continued improving its efficiency, by achieving a good amelioration of the Cost/Income Ratio at 30.9% in 2016 Vs 35.0% in 2015.
In the context of slower economic growth and higher volatility in foreign exchange market, Credit Agricole Egypt increased its provisions to reach 103%, noting that its non-performing loans ratio has remained almost stable at end of 2016 compared to end of 2015 pro forma (non-performing loans in foreign currency revaluated at pre-devaluation rate).
For year 2016, the Net income reached EGP 1,366.9 million, up by 32% compared to 2015.
High profitability, Good Quality of Assets and Strong Solvency:
| Ratios | Q4-16 | Q3-16 | Q4-15 | Δ Q4/Q4 | Δ 2016/2015 | ||
| Profitability | |||||||
| Return on equity | 58.40% | 50.60% | 46.30% | 26.20% | 51.00% | 41.90% | 21.70% |
| Return on assets | 3.40% | 3.80% | 3.60% | -5.40% | 3.00% | 3.20% | -8.80% |
| Efficiency | |||||||
| Cost – to – Income | 27.40% | 31.80% | 35.90% | -23.80% | 30.90% | 35.00% | -11.70% |
| Liquidity | |||||||
| Loans – to – Deposits | 49.00% | 50.20% | 55.10% | -10.90% | 49.00% | 55.10% | -10.90% |
| Assets Quality | |||||||
| Capital adequacy ratio | 11.57% | 14.83% | 14.39% | -19.60% | 11.57% | 14.39% | -19.60% |
| Non-performing loans ratio | 4.16% | 3.50% | 3.05% | 36.24% | 4.16% | 3.05% | 36.24% |
| Provision Coverage | 186% | 191% | 198% | -6% | 186% | 198% | -6% |
In 2016, despite the challenging environment, Credit Agricole Egypt managed to maintain its Non-Performing Loans ratio stable (excluding impact of devaluation) with one of the highest provision coverage level among commercial banks operating in Egypt.
Productivity and profitability indicators are the result of the solid operating performance. Capital Adequacy Ratio is reduced by 282 basis points due to higher Egyptian pounds counter value of Risk Weighted Assets in foreign currency (devaluation impact). However, solvency remains significantly above regulatory requirement. It is worth mentioning that the net profit achieved in 2016 will allow the bank to significantly increase its equity in 2017.
Continuous Support to Our Community
In 2016, CAE increased again its commitment (EGP 10
Million) to key projects supporting its community in the field of Education, Health, Youth and Social projects. CAE is also supporting the Federation of Egyptian Banks’ project for community development.
Conclusion:
Credit Agricole Egypt managed in 2016 a solid and sustainable growth, based on quality of service provided to its clients. The Bank’s profitability has been strengthened, with sound assets and robust solvency.
The Board of Directors and Executive Management will continue in 2017 to actively monitor the economic situation in order to ensure that the Bank and its clients remain well positioned.
Crédit Agricole Egypt will continue to support key investment projects in Egypt, in association with other entities of Credit Agricole Group and will reinforce its Proximity Banking activities, with a strong drive on digital transformation.
